Spell Out Terms of Settlement

BE FINANCIALLY RESPONSIBLE        
         
Working with a financial professional in addition to your divorce attorney also will help you retain a realistic perspective on your finances. In the ideal case, both parties should represent their pre- and post-divorce finances accurately and in a legitimate way. Doing otherwise only fosters distrust and antagonism, which will likely be counter-productive financially, as well as could cause problems in trying to come to an agreement on other issues, especially those involving the marriage's children.   
         
Will both spouses work post-divorce? Or will one require additional support because that party must remain at home to care for children or other dependents? About those dependents, do the children need special schooling? Are they planning to attend college? Have savings already been started for them and who will continue to add to those education funds? 

Consider inflation and other financial effects Don’t underestimate inflation’s effect on any agreement. When possible factor that into a lump sum or spell out any increases to continuing periodic payments. Along that same line, also consider the future value of any investments (along with future potential tax costs) of any holdings that are divided between you and your spouse.   

Also consider the liquidity of any asset split. While the dollar amounts might be the same where one party gets bank accounts and the other gets stocks and other equities, accepting mostly illiquid property could pose cash flow problems. This type of liquid-vs.-illiquid division sometimes caused problems when the family home is involved. The spouse who takes the highly-valued real estate, for example, finds himself or herself house rich but cash poor and unable to meet usual, day-to-day living expenses.  


DON'T DISCOUNT DEBT
    
Starting over after a divorce is hard enough. You definitely do not want to try to rebuild your life with bad credit causing problems. You can, however, take steps to minimize this problem during the divorce and settlement process. As part of discovery, both parties should obtain copies of their credit reports so they can identify all joint accounts, any accounts that either might have been unaware of and those accounts that pose any potential credit problems.